New items make up 30 percent on Friendly’s revamped menu . . . .

Friendly’s Embarks on New Culinary Adventure

When Amici Partners Group officially purchased Friendly’s out of bankruptcy in early 2021, it wasn’t doing so as an unfamiliar party.

Investors of the company have been involved with the legacy chain in several capacities over the years, including as owners/operators, leaders in the system, and customers. For instance, COO Dawn Petite has been an employee of Friendly’s for roughly four decades.

“The company hasn’t been purchased by newbies in the Friendly’s world,” says Chief Experience Officer Roberto De Angelis. “They know the brand very well.”

Because of that existing connection, the leadership team immediately recognized that an enhanced menu must play an integral role in the chain’s multi-year turnaround effort.

Work began in July 2021, with the roughly 130-unit Friendly’s examining its customer demographics and separating them into four age groups—children (1-12), teens (13-19), young adults (20-29), mature (30-60), and senior (60 and above). From analyzing restaurants and looking at clientele in different locations throughout the day, the company discovered it was severely lacking in the 20-29 age range. As young teens began to drive, their list of favorite places didn’t include Friendly’s, De Angelis says.

To create appeal to this group, the first step was resizing the menu. The casual-dining chain began with 11 items when it opened in 1935, but that has ballooned to 52 selections and eight pages, which De Angelis says is too much for kitchens to handle. Amid those 52 choices, 75 ingredients—tomatoes, lettuce, beef, chicken, American cheese, etc.—were used roughly 280 times across the menu, or an average of 3.7 instances.

Friendly’s attacked the problem with the idea that commonality—and not SKU count—was the enemy. So the company increased the number of ingredients to 100 but reduced their appearances to 225 times, or an average of 2.3.

“I’m saying this is important because when you read the menu you came across, bacon, bacon, bacon, bacon, American cheese, American cheese, American cheese like a gazillion times,” De Angelis says. “So you keep reading these 10 pages and after page six or seven, you’re still reading the same thing, but with a different title for the dish.”

As part of the enhancement, Friendly’s created pasta and chopped burger categories and upgraded its salad section. Twelve new menu items were added, including the $100,000 Cobb Salad, Jammed-Up Burger, Cheese Skirt Burger, Tex-Mex Alfredo Taco Pasta, and Aloha Stir Fry Chicken. The chain, known for its ice cream, also added a Barking Pretzel flavor.

The end result is 39 total items, with 30 percent being new.

“You do your engineering and you look at all the items and you divide them up by popularity, by speed of execution, by price, by margin, by calorie counts, and all of that,” De Angelis says. “We did that, as well, of course. But it was not enough to really crack the code of what the first substantial change in the menu should have been after so many years. This is a menu that has built over a period of 87 years. It’s a legacy menu and it was not easy.”

Friendly’s started with 25 new items, but it knew that would be too much for a couple of restaurants to test. So the chain divided the products into groups of 12 and 13 and launched them separately in 10 restaurants, one labeled red menu, and the other, a blue menu. Out of that, Friendly’s found its 12 best choices.

As the menu was developed, the company—like most full-service chains—was having difficulties with recruiting and retaining labor. Because of high turnover, De Angelis and his team knew paper or verbal training would be lost in translation, so Friendly’s hired an agency to create downloadable videos that are about two to three minutes. Leadership can track how many workers visit the website and watch the videos.

Friendly’s also created hubs where managers and cooks learn recipes and take back knowledge to their individual restaurants.

During the innovation process, the company was concerned with rising commodity prices, as well. When matters began to escalate in July, De Angelis says Friendly’s found itself facing a fork in the road—go through endless amounts of analysis or just initiate menu changes knowing prices would settle at some point. The chain chose the latter and is hoping to soon reap the benefits.

“It just couldn’t wait,” De Angelis says. “We decided against paralysis by analysis. Just get it done. And also we did not revolutionize the menu. We didn’t bring items that are very costly. So everything is pretty much marching along with the same cost, plus our inflations and all the upticks in commodity prices.”

The innovation isn’t stopping here either. Although De Angelis couldn’t reveal everything, he hints Friendly’s will soon launch a game-changing ice cream menu that “goes light-years beyond sundaes.”

The menu is one of many strategies geared toward the brand’s re-imagination. The chain hired a marketing agency and will launch new TV commercials in May. Friendly’s is also aggressively remodeling stores and switching to in-restaurant musical choices that cater to different age groups.

In February, the company opened Friendly’s Cafe, a fast-casual spinoff that allows guests to order directly at the counter, with a QR code at the table, or through in-store pickup. The 2,700-square-foot store, based in Westfield Massachusetts, has seating for 45 customers and four parking spots dedicated to curbside pickup. The concept features many of the new menu items being inserted at full-service outlets across the country.

Additionally, Friendly’s launched a new rewards program and tested co-branded stores in Connecticut with Smoothie Factory.

Each of the levers is meant to appeal to newer, younger customers, but maintain core guests that have enjoyed the brand for years.

“It is a holistic approach,” De Angelis says. “The menu was not an island. We were very conscientious of the fact that we needed more things to go with the menu. Everything that we are putting in place or into play this year will go in favor of creating an environment that will be appreciated by people who will consider Friendly’s for the dining experience.” – Source: FSR.

For effective word-of-mouth marketing, brands need to consider the “primal branding” model . . . .

Brand Enthusiasts Back Beliefs, Not Products

For some people, a brand is a logo and a website. For others, it describes an image: what kind of people wear Nikes, drive Teslas or watch “Julia.”

Marketers may imagine that their brand is an idea under their control. But in reality, it’s a community of people who share the same beliefs. When approached this way, that community can springboard into shared purpose, awareness, advocacy and growth.

I developed a framework to help marketers curate their own story called “Primal Branding,” which looks at brands as belief systems. Once you create a belief system, you attract others who share your beliefs, which creates communities.

A few years back, I gave a TEDx talk where I explain how it works:

In short, products that don’t spread their narrative across social and digital media leave it to consumers to create their own storyline. That storyline will probably be merely functional (“great tasting,” “low price,” “longer lasting”) and not embedded with the emotional touchpoints that create true advocacy.

Why primal branding matters today

Word-of-mouth marketing has always been considered the most important form of advertising, but that’s especially true today.

In the past, marketers could not measure or overhear what customers were saying about their products around water coolers or at Monday morning meetings — much less the gossip about their brand. Today they can topline all those metrics.

The only role a company really has today is to make sure they deliver a quality product. Then message their seven pieces of what I call “primal code” across social, digital, and traditional media.

Why? So that your advocates have the facts they need to tell others and support you.

These advocates become your tool for growth as they push your message out to the network’s “friend’s friend’s friend.” And your “brand” comes for free.

Patrick Hanlon is CEO of www.primalbranding.co and author of “Primal Branding: Create Belief Systems that Attract Communities.” You can follow him on Instagram. If you like this article, sign up for the SmartBrief on Social Business email newsletter for free.  – Source: SmartBrief.

Panera Bread is piloting Miso Robotics’ new automated coffee brewing system as it doubles down on its coffee and tea subscription program. Miso Robotics already has partnerships with Chipotle Mexican Grill, White Castle, and Inspire Brands . . . .

Panera Bread is testing automated coffee brewing with Miso Robotics

Panera Bread is piloting Miso Robotics’ new automated coffee brewing system as it doubles down on its drink subscription program.

It’s part of a broader shift across the restaurant industry toward automation as many eateries struggle to find workers and labor costs rise. For example, McDonald’s is working to automate taking drive-thru orders, while California Pizza Kitchen has been testing a robot to help bus tables.

The automation trend has made Miso Robotics popular with both restaurant chains and investors. Last month, Chipotle Mexican Grill announced it is testing a robot made by Miso that makes tortilla chips. The startup’s other fast-food partners include White Castle and Arby’s owner Inspire Brands.

Since its founding in 2016, Miso has crowdfunded more than $50 million from restaurant chains such as CaliBurger, venture capital firms, and ordinary investors, according to the company. It’s in the middle of its Series E round, which values the startup at $500 million.

“We’ve seen an ever-increasing tidal wave of demand,” Miso Robotics CEO Mike Bell said in an interview. According to Bell, the restaurant industry’s biggest problem is the labor gap, which is caused by restaurants needing more workers than are available. “And it’s not going away,” he said.

Miso’s latest launch is the CookRight Coffee system, which uses artificial intelligence to monitor coffee volume and temperature. It also provides predictive analytics that can tell the restaurant more about what kind of coffee its customers enjoy and when. Bell said that Miso charges customers “a few hundred dollars” a month for its CookRight technology, while the startup’s Flippy the Robot sets operators back several thousand dollars in monthly fees.

Panera’s goal for the system is to give employees more time to devote to other tasks, such as helping customers and making sure coffee drinkers enjoy every sip of their beverage, especially if they’re Unlimited Sip Club subscribers.

“We never saw this as cost savings or a defense against the labor market at all,” said George Hanson, Panera’s chief digital officer.

Panera launched the coffee and tea subscription program over two years ago after overhauling its coffee selection. For $8.99 a month, customers can drink an unlimited amount of coffee and tea. The low monthly cost of the program gives Panera an easy way to lure in customers and persuade them to change their breakfast habits.

For now, only two Panera locations are testing the CookRight Coffee system. Hanson said the chain will make a decision in the coming weeks about how fast and how much to scale across its footprint. Panera owns nearly half of its U.S. cafes, while franchisees operate the remaining 1,200 locations.

Bell said that Miso expects that thousands of its partners’ restaurants will have CookRight technology installed by the end of the year, as well as hundreds of Flippy the Robots.

When it comes to the rest of the kitchen, Hanson said that Panera will keep looking for more opportunities to automate tasks for its employees if it makes sense, but he doesn’t envision that its restaurants will be entirely run by robots in the future. However, to Bell, it’s a matter of when, not if, restaurants become automated.

“Opportunistically, if we see things like this that will help our associates, we’ll look at them,” Hanson said. “I do see the industry very curious about this, but maybe in some areas, I’ve seen that curiosity comes from the cost of labor, and that’s just not our filter.”

The soup and sandwich chain is privately owned by Einstein Bros.′ parent company JAB Holding, so it doesn’t disclose how many Unlimited Sip Club subscribers it has. However, Panera announced in November it would go public again through an initial public offering after securing investments from restaurateur Danny Meyer and his special purpose acquisition company.

Other companies have recently delayed their IPOs due to inflation fears and market volatility. A representative for Panera declined to comment on if the chain has modified its plans.  – Source: CBNC.

Krispy Kreme ties doughnut prices to average gas price on Wednesdays to offer inflation relief . . . .

Krispy Kreme Will Have a Doughnut Deal Every Wednesday Through May 4. The price of a dozen will change

After record-high gas prices in March, there is finally some relief at the pump.

And some restaurant chains and gas stations have new limited-time deals with the goal of providing additional relief from high prices and inflation.

Starting Wednesday and every Wednesday through May 4, Krispy Kreme is offering a dozen Original Glazed Doughnuts for the price of a gallon of gas, which it calls “doughnut deflation.”

For April 13, the price is $4.11 and the price will be “based on the national average price of a gallon of regular gasoline in the United States on the Monday at the beginning of the week,” the company said.

There is a limit of two dozen at the promotional price at participating shops nationwide at the drive-thru and for pick-up by ordering online and through the Krispy Kreme app.

“While Americans deal with the rising PPG – price per gallon – of gasoline, we’re lowering our PPOG – price per Original Glaze,” Dave Skena, Krispy Kreme’s chief marketing officer, said in a statement. “Inflation and high gasoline prices are serious and forcing families to make tough tradeoffs. …  A dozen Original Glazed Doughnuts for the price of a gallon of gas will help our fans make midweek a little sweeter for their friends and family.”

Krispy Kreme said it will alert fans to the price each week by posting it on Facebook, Instagram, Twitter, and Krispykreme.com/offers/beatthepump. Source: Krispy Kreme

Bojangles free gas gift cards

Bojangles is giving away a million dollars worth of free gas gift cards with every purchase of a Bojangles Family Meal with 12 or 20 pieces of bone-in chicken, biscuits, sides, and iced tea.

The meals come with a $10 gift card until “supplies run out” to “help customers offset the rising cost of fueling up their tanks,” the fast-food restaurant said in a statement.

“Southerners are known for being friendly neighbors, so as a Southern brand, it’s in our DNA to want to help our customers who are feeling the pain of soaring gas prices,” said Jackie Woodward, Bojangles’ chief brand and marketing officer in the statement.

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Dunkin’ and Shell team up with promo.

Through May 12, Shell Fuel Rewards members can save 30 cents per gallon at Shell after their fifth beverage purchase at Dunkin’ with linked DD Perks and Fuel Rewards accounts.

The offer is a three-times plus up from the standard Dunkin’ offer of saving 10 cents per gallon.

DUNKIN’ COLLAB:Dunkin’ has a new makeup collection with e.l.f. Cosmetics inspired by donuts and coffee

COSTCO HOURS 2022:Costco’s senior hours and special COVID hours end this week, clubs closed Easter

Wawa app brings gas discount

Now through May 8, save 15 cents per gallon at Wawa when you pay with the chain’s app. Learn about how the app works here.

Also, Thursday, April 14, is Wawa Day, which means free coffee. For its 58th anniversary, Wawa will give away 2 million free cups of any-size, hot coffee for all customers, chainwide, all day Thursday, the company said in a news release.

Follow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko. For shopping news, tips and deals, join us on our Shopping Ninjas Facebook group. – Source: USA TODAY.

Popeyes, Uber Eats offer ‘Dunkable Meal’ deal amid NBA playoffs

Brands team with players Anthony Edwards and Ja Morant to promote the delivery-only deal

Popeyes Louisiana Kitchen and Uber Eats are teaming with professional basketball players for a special half-off Most Dunkable Meal deal through April 17.

Popeyes, a division of Toronto-based Restaurant Brands International Inc., on Tuesday introduced the Most Dunkable Meal in time for the NBA playoffs.

Available exclusively through Uber Eats, the limited-edition meal features a Popeyes five-piece tender combo, side, biscuit, drink, and five sauces “for extra dunking potential,” the company said. The meal will be 50% off on Uber Eats from April 12-17.

“With the limited time 50% off offer from April 12-17, the meal combo ranges in price from $5-$8, although the final price and availability may vary by location,” a company spokesperson said.

The brands have teamed with Anthony Edwards of the Minnesota Timberwolves and Ja Morant of the Memphis Grizzlies to promote the deal

“Everybody knows I’m an in-game dunker,” said Edwards in a statement, “and every hooper loves that incredible feeling of throwing it down and putting your opponent on a poster. I’m excited to team up with Uber Eats and Popeyes to give our fans a taste of that same, delicious feeling with the Most Dunkable Meal.”

Morant added: “It’s no secret that one of my favorite parts of the game is the dunk, so I’m pumped to team up with Uber Eats and Popeyes on the Most Dunkable Meal to put the dunking power in our fans’ hands.”

Popeyes recently unveiled a new design at a unit in New Orleans, La.

Popeyes was founded in New Orleans in 1972. As of Dec. 31, Popeyes had 3,705 restaurants globally. – Source: NRN.
 

While the chicken sandwich may have grabbed headlines in recent years, the burger remains a quick-service staple that isn’t going anywhere . . . .

The Fast-Food Burger is Still Going Strong

While the chicken sandwich may have grabbed headlines in recent years, the burger remains a quick-service staple that isn’t going anywhere

The burger remains one of the top-selling foods nationwide, found everywhere from fast food to gastropubs, fairgrounds, and high-end eateries.

As other products come into vogue—the fried chicken sandwich being a recent one— the burger hasn’t ceded as much ground as onlookers might believe. Just consider the fact McDonald’s serves 1 percent of the world’s population every day. That’s 68 million people or 75 burgers sold per second.

In the year ending 2020 (when the “chicken sandwich wars” raged on), burgers were still included in 13.5 percent of all restaurant orders, which translated to 7 billion servings, according to The NPD Group. Chicken sandwiches (breaded and grilled) were featured in 6.7 percent of all restaurant orders in the U.S, which amounted to 3.5 billion servings.

But if burgers are so ubiquitous, and good burgers at that, what keeps customers coming back?

For Smashburger, it’s staying true to what the brand does well and guarding those traits: Every burger is smashed on the grill for 10 seconds before it’s left to cook. “We tell this story almost continuously,” says Scott Johnson, chief marketing officer for the Denver-based company.

This is not only an important branding piece but also caramelizes the patty and adds flavor. “Our procedure is as important as our ingredients. We have such a unique way of cooking our burgers and that’s always going to be our bread and butter,” adds Ty Goerke, leading chef and senior manager of operations.

But the brand doesn’t just rely on a cooking technique—it also focuses on quality ingredients that include 100 percent. Angus beef. Everything is prepared in-house, and Smashburger makes meals to order.

As a brand, Goerke says, Smashburger must continue offering customers’ favorite burgers but also constantly think ahead. “We have to keep developing … and creating what people want.”

Burgers are so important to Hopdoddy Burger Bar that in January it purchased another burger brand, Grub, adding 18 stores to its 32, largely in new markets.

Burgers remain popular because operators can constantly rethink them, says Jeff Chandler, CEO of Austin, Texas-based Hopdoddy.

The burger, he says, “is so uniquely positioned as a food vessel because of the flavors, food builds, and customization.” Add to that, he says, “the savoriness of burgers, the juiciness of burgers. You can be dynamic with the flavors and the ingredients.” Yet at the same time, he points out, burgers are comfort food. “We embrace this concept of doing the familiar in an unfamiliar way. That means the type of burger build but also the sourcing part of it, the cooking, and prep.”

Within Grub’s and Hopdoddy’s menus, classic burgers and slight variations of them constitute 60 percent of burger sales, though the desire for customization has gone up during COVID, Chandler says.

Killer Burger stays true to its mission of being an oasis from life “and bringing back the nostalgia of having a burger on the grill in your backyard,” says John Dikos, president and chief development officer of Portland, Oregon-based fast-casual.

“In anything you do, you’d better clarify what you do and who you are. There are so many upstarts, so much noise. There has to be a story, you have to be authentic and not try to be something you’re not, be confident in who you are.”

Killer wants every bite of its burgers to be well-thought-out: For the bacon to be crisp enough to break, not bend, when it’s bitten into, and for there to be some topping in every bite.

To achieve that, it places a lead focus on ingredients. “Every bite has to be a clean bite to make sure the product that goes out of the door is good enough,” Dikos says. Killer Burgers’ teams, he adds, feel empowered to let waste increase in order to produce this perfect burger—even an imperfect pickle is discarded.

There’s no ignoring the fact that while burgers remain the lead act, the prevalence of plant-based eating has shaken up traditional menus.

Smashburger is very cognizant of this trend. It’s had a black bean burger on the menu for 12 years, but it’s time to reformulate it, Goerke says. The company is now removing the cheese and egg to make it vegan. It’s also adding some vegan shake options and sides. “Even though we’re a burger company we’ll be respectful of what is going on,” he says.

Smashburger also introduced a pulled pork tailgater in late 2020. “That not only was new and interesting and brought another protein ingredient to the burger but also showcased our culinary expertise,” Johnson says. “Having burgers in a lot of different forms is where we want to go and as consumers’ tastes evolve we want to move with them.”

Hopdoddy has leaned into Beyond Meat. “We are impressed with their team and their CEO has been an awesome resource so we see being more aggressive in that arena and introducing plant-based products when and where we can,” Chandler says.

Some consumers are shifting to plant-based foods due to concern for the environment, which has led brands to commit to better sourcing practices in order to make strides toward alleviating climate change through their beef as well.

Hopdoddy changed its practices in order to become a better steward of the environment. The company only works with farmers and ranchers that commit to regenerative farming practices. And it works with companies whose core values align with Hopdoddy’s. “We commit to investing in those ranchers and suppliers who share core values with us because it needs to be a sustainable ecosystem,” Chandler says.

Improving the in-restaurant experience and making off-premise sales a priority topped his to-do list when he took over the Asian casual-dining chain in 2020 . . . .

How PF Chang’s CEO Damola Adamolekum Tackled Challenges Inside His Restaurants’ Walls – and Outside Too

When Damola Adamolekun became CEO of P.F. Chang’s China Bistro in 2020, he pinpointed two challenges to deal with:

“The brand was still as strong as I remembered,” Adamolekun told the audience Tuesday at Restaurant Leadership Conference, during an interview with Restaurant Business Senior Editor Joseph Guszkowski. “The quality of the food was still good.”

But the dine-in experience was lacking, Adamolekun said, and P.F. Chang’s off-premise business was next-to-nothing at just 18% of the 200-unit chain’s sales.

Adamolekun is a partner in Paulson & Co., the investment group that joined forces with TriArtisan Capital Advisors to buy P.F. Chang’s for $700 million in early 2019 from private-equity firm Centerbridge Partners.

“What was missing was the experience around the meal,” he said. “The lighting was too bright. The music was non-existent.” The décor? “Beige central,” he said.

Delivery and to-go orders were viewed as an annoyance, rather than an opportunity, he said.

So, in the year leading up to the pandemic Adamolekun and the P.F. Chang’s team worked to turn the business around.

They added pops of color to the dining room. (“Good design doesn’t have to be expensive,” he said.) And they found ways to create some head-turning, experiential menu items while also eliminating dishes that didn’t fit with the character of the brand—bye-bye Asian Mac & Cheese. (“You can’t just put ‘Asian’ in front of the name,” Adamolekun said. “It wasn’t core to what we did. We strayed a bit on the menu.”)

At P.F. Chang’s, off-premise went from an after-thought to a major money-maker.

Sales at the chain climbed 31.7% in 2021 over the year before, according to Top 500 chain data from Restaurant Business sister firm, Technomic.

The company launched its P.F. Chang’s To Go offshoot to focus on delivery in crowded urban areas where building a full-sized bistro might be cost-prohibitive.

The chain now operates about a dozen of the small-footprint, fast-casual-type locations around the country, but Adamolekun said he sees runways for up to 1,000 of them around the country.

Self-delivery is now used in 90 of the brand’s full-service locations, though he said he has no plan to move completely away from third-party delivery platforms. Restaurant teams like the self-delivery model, he said, because tips are retained in-house.

One area in which he remains steadfast in his lack of enthusiasm, though, is ghost kitchens. Don’t expect to see P.F. Chang’s opening any delivery-only locations.

“We get a lot of walk-in business,” Adamolekun said. “When you don’t have that front of the house, you lose maybe half your sales of people just walking in.”

UPDATE: This story has been updated to correct the year Damola Adamolekun became CEO of P.F. Chang’s. – Source: Restaurant Business.

Program participant plans future in law enforcement, and maybe as a restaurant owner.

College Student Has High HOPES After Start at Cheesecake Factory

Schofield is about to graduate from college and plans to become a police detective or probation officer. She’d also like to own a restaurant, too.

Shavonne Schofield believes patience is a virtue.

Patience can help us achieve our goals and avoid making bad decisions. That’s the lesson she’s learned, and thanks to it, she’s finding out that now is finally her time to grow.

At 24, the Boston native and participant in Hospitality Opportunities for People (Re)Entering Society(Opens in a new window) (HOPES), is about to graduate from college and begin the next phase of her journey—perhaps as a police detective or probation officer.

She’d like to own a restaurant someday, too.

Discovering HOPES

HOPES, the National Restaurant Association Educational Foundation program developed in partnership with several community-based organizations, correctional departments, and state restaurant associations, trains adults 18 years or older(Opens in a new window) who are or were justice-system involved to find jobs and potentially establish careers at restaurants and other foodservice businesses.
In 2019, Schofield found herself aging out of the foster care system. She was attending Bridgewater State University but needed a job and a place to live.
Ryan Brennan, a case manager at Action for Boston Community Development (ABCD), introduced her to HOPES and helped her navigate the training and subsequent job interview she needed to begin work as a host at the local Cheesecake Factory restaurant. With the job, and a voucher for an apartment, HOPES offered her a lifeline, and she grabbed it.

“I’ve been in college for about six years now, working on my bachelor’s degree in criminal justice,” she says. “I’d been through hardships and was looking for a job. I needed to get out on my own and rent an apartment. Then the pandemic happened, and finding that job was really hard. Ryan not only helped with that but also with resources for housing. He’s been a great support.”

Learning the ropes, pursuing dreams

Working at the Cheesecake Factory also reawakened her passion for cooking and food, and sparked her interest in the restaurant industry, she said.

“I like to cook—mostly Southern food—and it’s actually become a dream of mine that one day I might open my own restaurant,” she says. “When Ryan first suggested I try working there, I was totally for it. I wanted to get an insider’s knowledge of what it’s like to work in that environment, and what it might be like to run a business like that. The biggest lessons I learned there were how to prioritize tasks and accommodate customers’ needs, especially during a pandemic.”

Schofield ultimately left the job to accept another that fit her original career path in law enforcement, working security at Wellesley College.

She says patience has gotten her through, as it has during most of the tough times in her life.
“It’s taught me that even when you’re most challenged if you wait a little longer, you’ll get what you need—and what you want.

“I’m really strong; I’ve learned I can do whatever I put my mind to. That’s what keeps me going. I’ve realized that if I don’t do it for myself, no one will do it, and if I don’t ask for help when it’s needed, no one will know.”

Brennan agrees. “Shavonne has the ability to not just be patient, but also trust and believe that what she’s doing is right,” he says. “That’s what’s happening now, and it’s been amazing. It’s why she’s doing so well.” – Source: National Restaurant Association.

For years, Fridays at Beef ‘O’ Brady’s, a sprawling restaurant chain in the Southeast, meant one thing: the steak-and-shrimp special . . . .

Surf-and-Turf Specials Cut From U.S. Menus in Sign of Price Pain

But in January, Chief Executive Officer Chris Elliott saw signs that consumers were feeling the squeeze of soaring inflation. So he took the $12.99 surf-and-turf dish off the specials list, replaced it with a fish-and-chips platter, and slapped a $9.99 price tag on it. Even with the change, though, customer traffic has been flagging in recent weeks.

“People are looking for deals; they’re getting hammered everywhere — at the gas station, at the grocery store,” said Elliott, who acknowledges that restaurants, including his own, have also been raising prices.

One year into the inflation spiral that has rocked the U.S. economy, lower-income consumers are starting to shift spending patterns. They’re cutting back on more expensive items, ramping up on cheaper ones, and forcing restaurants, grocery stores, and retailers to rejigger their sales strategies. This marks a major break from 2021, when consumers, still flush with pandemic stimulus and newly won pay raises, kept spending at a frenetic pace even as annual inflation surged to a four-decade high.

“Consumers are becoming more sensitive to price,” said Krishnakumar Davey, president of strategic analytics at IRI Worldwide, a provider of market research and data. “March is the turning point.”

The dropoff in spending, executives and analysts say, is most pronounced in lower-income families as inflation overtakes those wage gains. Food prices rose 7.9% in February from a year earlier, the largest gain since July 1981. Updated U.S. inflation figures for March will be released on Tuesday. While job gains and a jump in savings mean the pandemic-era shopping boom may not be completely over, it’s clearly slowing.

Bank of America data show that households making less than $50,000 annually increased card spending by only 4% in March — about a third of the rise for those who earn more than $125,000 a year.

More than a third of U.S. households brought in less than $50,000 in 2020, excluding government stimulus payments, according to a Census Bureau report in September. That would total about 49 million households. Those in the lowest-income quintile spend 18% of their income on food and energy, compared with 11% in the highest one-fifth group, according to Bloomberg Economics.

This underscores the urgency of the Federal Reserve’s mission to restore price stability. Governor Lael Brainard highlighted the dynamic last week, noting that some families feeling crunched can shift to buying private-label goods. But for those already purchasing cheaper options, it won’t be as simple. Those shoppers “would have to either absorb the increase in cost or consume less,” she said.

Those in the food business are trying to adjust. Denny’s Corp. is promoting a $6.99 all-you-can-eat breakfast of pancakes, eggs and hash browns to entice customers who are “feeling the pinch at the gas pump,” Chief Brand Officer John Dillon said. But that same endless breakfast meal costs $8.99 in states where wages and commodity costs are running higher. And bacon? That’ll be an extra 99 cents.

Soaring prices at restaurants and retailers are a big reason why the average U.S. household will have to spend an extra $5,200 this year, or about $433 a month, for the same consumption basket, according to Bloomberg economists Andrew Husby and Anna Wong.

That doesn’t necessarily mean total consumer spending is poised to fall. In fact, economists are predicting an inflation-adjusted 3.1% gain after last year’s 7.9% jump, according to the median estimate compiled by Bloomberg. That’s still strong, and ahead of the average annual growth of 2.5%, the U.S. posted from 2016 to 2019.

Indeed, there’s still plenty of cash to be spent. U.S. households are flush with an extra $2.5 trillion in savings built up over the pandemic, and inflation pressures will absorb only about a quarter of it, Husby and Wong said.

Even at the lower end, “consumers in the bottom 50% of incomes and wealth have never had more excess net worth or liquid assets,” Tavis McCourt and other analysts at Raymond James Financial Inc. said in a report. And with the job market booming, “we suspect it will take longer for consumers to show significant stress/slowing demand than one would normally expect,” they said.

Even so, shoppers are now looking harder for ways to save on groceries. Foot traffic at dollar stores, especially those of Dollar General Corp., has generally held up better than at traditional retailers, according to data compiled by Placer.ai, which uses mobile-phone data to determine traffic.

Big-Box Shift

Momentum is also shifting among big-box retailers. Target Corp. trounced Walmart Inc. in sales growth during the pandemic, and the company’s more upscale clientele positions it well for the future. But sales gains at Walmart have been stronger in recent months, according to Bloomberg Second Measure, which analyzes U.S. consumer transactions to measure revenue. That suggests shoppers are increasingly drawn to Walmart’s mantra of everyday low prices.

As recently as the fall, IRI, the market researcher, was predicting food inflation of 6% this year, with most of the increases coming in the first half. Now, it’s predicting a jump of between 8% and 11%. The sharp increase appears to be spurring a sales turnaround for private-label brands. Spending on generic-brand food recently ticked up after slipping during the pandemic, IRI’s Davey said.

With many unable to pay more, companies’ profits are likely to fall. Friendly’s Restaurants is giving away more discounts than in the past and is also advertising big portions. CEO Craig Erlich said he hopes Friendly’s won’t have to raise prices this year. He’s simply not sure customers can keep up.

“That’s why we’re being mindful about not increasing prices significantly as we’ve seen out there,” he said. “It’s really a tough balance we face.” – Source: ©2022 Bloomberg L.P.

Chain operator Dine Brands Global Inc. has gained strength in the two years since the pandemic started . . . .

Dine Brands Plans to ‘Nurture’ Takeout Business

Restaurant chain operator Dine Brands Global Inc. has gained strength in the two years since the pandemic started, with Chief Executive John Peyton outlining three strategies that contributed to the change.
First, the Glendale company innovated the in-restaurant guest experience for diners at its Applebee’s Neighborhood Grill & Bar and International House of Pancakes (IHOP) restaurants.

“For example, our hygiene and safety protocols are enhanced and will become the new standard. Guests can now put their names on our waitlist and pay their bills with their phones,” Peyton said during a conference call with analysts to discuss fourth-quarter earnings.

Second, the company has innovated the off-premises experience.
At both Applebee’s and IHOP, takeout and delivery grew more than two times versus 2019, Peyton said.
“This is a largely incremental business that we intend to nurture and grow,” he added. “To go packaging is also next-gen; it keeps food hot longer and it’s designed to showcase our menu with supercharged technology investment and adoption.”

And lastly, operations have been streamlined and new revenue sources identified.
“Today, for example, our menus are streamlined by more than a third compared to pre-Covid,” Peyton said. “And as a result, our kitchens are more efficient, there’s less food waste, faster prep times (and) improved quality and consistency of those items that remain.”

Franchisees embraced outdoor dining during the pandemic, and expanded their seating capacity, Peyton added.
Applebee’s launched its Cosmic Wings and IHOP is testing two virtual brands – a grilled cheese concept called Thrilled Cheese and a quesadilla concept called Super Mega Dilla – in seven test markets in three states (Kentucky, Texas, and Arizona) with even more markets coming online, Peyton continued.

“And we work with our franchisees to expand our sales channels via ghost kitchens in the U.S. and abroad,” he said. “Most importantly, our asset-light model allows us to invest in what we do best – menu innovation, marketing and technology – all for the benefit of our franchisees.”

Dine Brands operates 3,600 domestic locations and nearly 200 locations internationally. It makes its revenue primarily through franchise and rental fees.

Fourth-quarter upswing

On March 2, Dine Brands reported an adjusted net income of $22.5 million ($1.32 a share) for the quarter ending Dec. 31, as compared to an adjusted net income of $6.4 million (39 cents) in the same period a year earlier. Revenue increased by 17 percent to $230 million.

Analysts who follow Dine Brands were pleased with the direction of the company. Jake Bartlett, an analyst with Truist Securities Inc., said in a research report on March 9 that Dine Brands had a strong long-term plan which he viewed as “credible” and could drive significant upside to the shares, “driven by accelerating development, multiple (same-store sales) drivers and strong return of cash,” he wrote.

Brian Vaccaro, an analyst with Raymond James & Associates Inc., said in his research report that it was a good sign the company and its franchisees were investing in technology and equipment to improve the guest experience off-premise, and drive operational efficiencies and enhance marketing.

“These investments will lead to a step-up in (general and administrative expenses) and (capital expenditures) in 2022, followed by more moderate growth in 2023 and beyond,” Vaccaro said in the report. – Source: Los Angeles Business Journal.

The restaurant industry is on the cusp of a new ‘category killer,’ executives say . . .  .

Greg Creed, formerly of Yum, and Meredith Sandland, formerly of Kitchen United, join Thanx CEO Zach Goldstein at the launch event

Two seasoned restaurant executives and recent authors provided insights into the future of personalization and digital layering in the restaurant industry during an event this week in Dallas, saying the industry is on the verge of another “category killer.”

Greg Creed, former CEO of Yum Brands, and Meredith Sandland, former chief operating officer at Kitchen United, joined Zach Goldstein, CEO, and founder of San Francisco-based Thanx, the loyalty and guest engagement platform, at The Henry in Dallas to discuss the future of restaurant marketing.

Creed is the author of “R.E.D. Marketing: The Three Ingredients of Leading Brands,” with “R.E.D.” referencing relevance, ease, and distinctiveness, and Sandland wrote, “Delivering the Digital Restaurant: Your Roadmap to the Future of Food.” (Sandland is also a regular contributor to NRN’s Speakerbox contributing author series.)

“We’re in a new era,” Goldstein said before the event. “And I’m actually really excited about this new era.”

Click here to stream the entirety of “An Evening with Restaurant Industry Veterans,” hosted by Thanx.

Citing Sandland’s book, Goldstein added that “where digital has become a key element of every restaurant is that data and personalization become far easier because you know more about your guest. You’re not guessing.”

“We’ve seen this in another part of hospitality with travel. We’ve seen this with e-commerce brands, and we are going to see this with restaurants,” he said, “where it’s not just about the quality or foodservice and location. Now it’s about how deeply you understand your guests through data and how you are using that to differentiate. That’s actually really exciting. It’s hard. It’s a new skill to build, but it’s really exciting for the years to come.”

The pandemic accelerated digital adoption, said Creed, noting that “disruption is a wonderful thing.”

“When disruption occurs naturally rather than have to be forced the big guys have to defend themselves as they’ve never defended before,” Creed added. “And the small- and medium-sized guys have a chance to disrupt the big guy.”

Everyone is going to have to improve, Creed said. “It’s just such an exciting time because everyone is going to have to really get their act together. They’re going to have to be much better at marketing. They’re going to be brilliant at digital. You have to be brilliant at everything because otherwise the guys that are big today won’t exist then the guys are small and medium now has a fighting chance, which I don’t think they had 20 years ago.”

Sandland, who admitted to using smartphone apps not for the rewards but for the ease of ordering, said some concepts will combine all the elements “into what is the next category killer.”

Restaurant quick service was followed by casual dining and then fast-casual, she said.

“Each of those in successive waves took over the restaurant industry,” Sandland said. “And someone is going to figure out how to combine all of this e-commerce consumer data stuff, electrification of kitchens, ghost kitchens, delivery, off-premises, new cooking methods [and] direct-to-consumer brands.

“Someone’s going take all of those ingredients and mix them together in an amazing way that becomes the next category killer,” she said.

Creed recently joined Thanx as an adviser to the board. – Source: NRN.

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